GM Announces Compensation Plan for Ignition Switch Crash Victims

In the wake of the mass ignition switch recalls, General Motors has announced a compensation plan for victims and their families. And while GM has made great strides to ensure this doesn't happen again, the addition of these payouts may still not be enough to finally put everything behind it.Families of those who died will receive a starting point of $1 million in compensation. Added to this, GM will also pay out lifetime earnings lost and $300,000 for a spouse and each child. Those who were injured from the ignition switch problem will also receive large payouts. Claims must be filed between August 1 and December 31.Currently, the tally for those affected by the ignition switch recall comes out to 54 accidents and 13 deaths. Compensating everyone involved will definitely hinder GM, but perhaps the most daunting issue the company faces is the criminal investigations.The payouts alone may cost the company billions of dollars, and GM is still being hounded by federal prosecutors and congressional investigators for potential criminal behavior in dealing with the defective vehicles. Even hiring former U.S. attorney Anton R. Valukas to do an internal investigation hasn't slowed investigators from taking a stand against the automaker.GM spokesman Greg Martin was reported as saying in an email, "We have openly acknowledged that the Southern District of New York is looking into activities at General Motors. As we have said before, we are fully cooperating and will continue to do so."And while the company may seem generous in offering the families financial support for their troubles, it's making a smart financial decision and one that will have other legal benefits. In a hearing earlier this month, GM CEO Mary Barra said that while the company would not cap the overall amount set aside for victims, it would pay anyone with a legitimate claim, but that upon acceptance of the compensation, the victims and families forgo their right to sue.Source: The New York Times

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